Visa’s new Fixed Acquirer Fee took effect at the beginning of this month and merchants who are subject to the passthrough of these costs by their acquirers will begin to see what the new fee means to them in terms of actual dollars when monthly statements are released in a few short days. An article in ISO&Agent includes comments from several acquiring industry observers on the topic.
“Merchants are struggling to cut corners, and here we are with another fee,” laments Ray Kenney, director of ISO partnerships at Cherry Hill, N.J.-based 1stPayGateway.Net.
The fee, which took affect April 1, may push merchants to the “tipping point” of deciding to stop accepting Visa cards and seek other means of payment, predicts Rod Katzfey, chief operating officer of Payleap LLC, a Warsaw, Ind.-based payments gateway. His company is giving customers the option to refuse Visa cards.
Visa admitted in an email message to ISO&Agent Weekly that the new fee comes as part of a response to the Durbin amendment to the Dodd-Frank law. The amendment, which took effect Oct. 1, essentially halved the average interchange fee on debit card transactions, limiting it to 21 cents, plus a few extra pennies to cover security costs. The previous average was about 44 cents per transaction.
The card brand’s attempt to compensate for that loss of revenue could have an unintended consequence, Katzfey speculates. The new fee could rankle legislators and regulators, prompting them to begin regulating credit card interchange fees sooner than they might otherwise have done, he says.